12 Aug 2017 - 19:18
Hollywood heads for its worst summer box office in a decade
By Kyle Stock / Bloomberg
Hollywood’s cold, wet American summer is pretty much over already.
Domestic box office revenue for the season is trailing last year by 11 percent and none of the major releases still coming are expected to change that trajectory. In fact, things are likely to get worse for U.S. studios before the leaves change. Without a film debuting widely over the Labor Day weekend, BoxOffice Media predicts the film industry will end the summer of 2017 with sales down by up to 15 percent. That’s a horror-film scenario that translates into roughly one in six American moviegoers choosing to stay home and stream Game of Thrones.
“It’s a dead zone,” said Jeff Bock, senior box office analyst at Exhibitor Relations Co. “In the next three weeks, there’s going to be a lot of doom and gloom.”
It’s not as if there wasn’t anything decent to watch. In looking at critical reviews of the top 10-grossing summer films, this season’s slate was one of the most lauded of the decade. Topped by Wonder Woman and filled out by media darlings like Dunkirk and Baby Driver, the most watched films of the season had an average score of 72 on Rottentomatoes.com, an aggregator of reviews. Only two other summers since 2007 had such high marks.
The problem for major studios is that some of those films should never have been at the top of the list, moneywise. Many of the CGI spectacles and raunchy comedies that usually win the sweltering day in theaters flopped spectacularly.
“We had one of the best summer’s ever in terms of the content,” said Paul Dergarabedian, senior analyst for ComScore Inc. “Smaller movies became very profitable, and the films that took risks were rewarded.” Translation: Formulaic, noisy, exploding blockbusters broke.
Consider the Transformers franchise, which historically is impervious to critical volleys. Over the past decade, four of these films buzzed and whirred through terrible ratings, stomped into theaters and left with huge bags of cash. The sophomore film of the franchise—slapped with a 19 percent approval score—was second only to Avatar in the 2009 revenue ranking.
Not so this year. Saddled with its typical terrible press, Transformers: The Last Night, sputtered out of the gate and managed to garner barely half as much domestic revenue as the previous film in the series. It was bested by Dunkirk, a Warner Bros. military drama with a time-bending twist by director Christopher Nolan—it cost less than half as much to make.
A similar storyline panned out for the unsurprisingly bad Pirates of the Caribbean: Dead Men Tell No Tales, The Mummy and a string of R-rated romps led by Baywatch. “Sequels are generally the industry’s safety net, and that safety net isn’t holding anymore,” Bock said. “There’s a huge rip in the way Hollywood does business.” Meanwhile, those few big budget productions that managed to win over critics, including Wonder Woman and the latest Spider-Man vehicle, were rewarded.
To be fair to Los Angeles producers, this would have been hard to predict. Stuporous summer audiences will typically show up in waves for any feature with a big enough marketing campaign. Tell them loudly that Rush Hour 3 will be fun and you’ve got a box office braggart on your hands. We crunched box office revenue and aggregate critical scores for the top 10 grossing movies of every summer in the past decade—100 films in all—and found the correlation between positive press and ticket sales fairly slight—.28 to be exact. For every Oscar-stuffed spectacle like Mad Max: Fury Road, there’s a Grown Ups, which had a 10 percent approval rating and still rounded up almost $162 million in domestic theaters.
These days, however, would-be ticket buyers don’t need to read reviews. They can just look at an approval score aggregated by a site like Rottentomatoes.com, an IMDb property, or Metacritic, a unit of CBS Interactive. Even the worst films used to at least get one solid weekend of sales before a poor reputation caught up to it on Monday. Twitter and Facebook, however, have shortened that window to the point where a film like King Arthur: Legend of the Sword is pretty much dead-on-arrival Friday night. “Social media makes the water cooler effect immediate,” Dergarabedian said.
Shawn Robbins, chief analyst at Boxoffice.com, calls it “the Rotten Tomatoes effect” and believes studios are finally beginning to pay attention to it. “The important lesson studios should be taking away is just because you put a bunch of franchises on the schedule, doesn’t mean they are going to make money,” Robbins said. In coming summers, he expects Hollywood to offer more horror films, which tend to be immune to ratings, and a greater share of inexpensive but carefully crafted dramas and comedies like The Big Sick, an Amazon Studios project that parlayed Sundance praise and a limited release into a $35 million domestic haul.
Producers, however, aren’t likely to double screen-writing budgets, sack the CGI staff, and tear up a years-long release schedule packed with action. While the blockbuster terrain has shifted, the rest of the world—and its burgeoning movie market—is acting much like U.S. audiences circa 2007. The new offerings from the Pirates of the Caribbean and Transformers franchises each collected almost eight out of their 10 box office dollars abroad. This year, North America accounts for just shy of 30 percent of global box office revenue, according to ComScore Inc.
Time will tell if the “Rotten Tomatoes effect” moves abroad. In the meantime, Hollywood will be busy trying to make up lost ground. Jumanji: Welcome to the Jungle, starring Dwayne “The Rock” Johnson, is scheduled for December.